DEPARTMENT OF ACCOUNTANCY

BAINTE1X – INTEGRATED ACCOUNTING FUNDAMENTALS

QUIZ NO. 6 – PARTNERSHIP DISSOLUTION AND LUMPSUM LIQUIDATION

NAME: (surname first)________________________________ SCORE: __________________

YR./ SEC.: _________________ DATE: ___________________

GENERAL DIRECTION: You are given two part examination, Part I – Theories (1pt each) and Part II Problem Solving –
(2pts each). Read and analyze the following questions and choose the best answer by shading the letter of your choice in
your answer sheet. STRICTLY NO ERASURES ARE ALLOWED.

PART I – THEORIES

1. A person may become a partner in a partnership by all of the following methods except
a. Investing in the partnership with a bonus to the new partner
b. Making a loan to the partnership
c. Investing in the partnership with a bonus to the old partners
d. Purchasing a partner’s interest

2. If a new partner purchases his interest from an old partner, the only entry on the partnership books is a
credit to the purchaser’s capital account with a debit to the
a. Bonus account
b. Cash account
c. Capital account of selling the partner
d. Capital accounts of other partners

3. Which of the following does not result in the dissolution of a partnership?

a. Marriage of a partner
b. Withdrawal of a partner
c. Addition of a new partner
d. Death of a partner

4. The accounting treatment for the sale of the interest of a retiring partner to an outsider or to the remaining
partners is the same as
a. Admission of a partner by purchase
b. Admission of a partner by investment
c. Sale of interest to the partnership
d. Both A and B

5. When the partnership purchases a retiring partner’s interest, the settlement to the retiring partner includes
the following except
a. cash
b. equipment
c. depreciation expense
d. notes payable
6. The following should be considered in determining the interest of a retiring except
a. Payable to a co-partner
b. Receivable from the partnership
c. Share in asset adjustment
d. Share in profits

7. When a partnership purchases the interest of a retiring partner at less than book value, there must be a
a. Bonus to remaining partners
b. Bonus to retiring partner
c. Bonus to remaining partners/negative asset revaluation or both
d. Bonus to retiring partners/positive asset revaluation or both

8. If the total contributed capital exceeds the agreed capital with the new partner’s investment is the same as
his capital credit, then the admission of the new partner involved a
a. Bonus to new partner
b. Bonus to old partners
c. Negative asset revaluation
d. Positive asset revaluation

9. If the agreed capital is equal to the total contributed capital with the capital credit and contribution of the old
and new partners being the same, there exists
a. Asset revaluation and bonus
b. Negative asset revaluation
c. No asset revaluation and no bonus
d. Positive asset revaluation

10. If the capital credit of the new partner is less than his contribution with no adjustment in asset values, then
the admission resulted in a (bonus to the old partners)
a. Asset revaluation and bonus
b. Negative asset revaluation
c. No asset revaluation and no bonus
d. Positive asset revaluation

11. Which of the following results in dissolution of a partnership?

a. contribution of additional assets to the partnership by an existing partner
b. receipt of a draw by an existing partner
c. winding up of the partnership and the distribution of remaining assets to the partners
d. withdrawal of a partner from a partnership

12. The admission of a new partner under the bonus method will result in a bonus to
a. the old partners only.
b. the new partner only.
c. either the new partner or the old partners, but not both.
d. none of the above.

13. If a bonus is traceable to the previous partners rather than an incoming partner, it is allocated among the
partners according to the
a. profit-sharing percentages of the previous partnership.
b. profit-sharing percentages of the new partnership.
c. capital percentages of the previous partners.
d. capital percentages of the new partnership.
14.The fair market value of a partnership can be implied by
a.adding the incoming partner's market value of consideration to the book value of the existing partnership.
b.the tax basis of the old partner's assets added to the incoming partner's consideration.
c.The incoming partner's market value of consideration divided by the incoming partner's percentage share in
profit and loss.
d. The incoming partner's market value of consideration divided by the incoming partner's percentage
ownership share in the new partnership.

15. The following is the priority sequence in which liquidation proceeds will be distributed for a partnership:
a. partnership drawings, partnership liabilities partnership loans, partnership capital balances.,
b. partnership liabilities, partnership loans, partnership capital balances.
c. partnership liabilities, partnership loans, partnership drawings, partnership capital balances.
d. partnership liabilities, partnership capital balances, partnership loans.

16. Which of the following statements is correct regarding a partner's debit capital balances?
a. The partner should make contributions to reduce the debit balance to whatever extent possible.
b. If contributions are not possible, the other partners with credit capital balances will be allocated a portion of
the debit balance based on their proportionate profit-and-loss-sharing percentages.
c. Partners who absorb another's debit capital balance have a legal claim against the deficient partner.
d. All of these statements are correct.

17. The doctrine of marshaling of assets

a. is applicable only if the partnership is insolvent.
b. allows partners to first contribute personal assets to unsatisfied partnership creditors.
c. is applicable if either the partnership is insolvent or individual partners are insolvent.
d. provides that when the Uniform Partnership Act is adopted, amounts owed to personal creditors and to the
partnership for debit capital balances are shared proportionately from the personal assets of the partners.

18. If a partnership has only non-cash assets, all liabilities have been properly disbursed, and no additional
liquidation expenses are expected, the maximum potential loss to the partnership in the liquidation process
is:
a. the fair market value of the non-cash assets
b. the book value of the non-cash assets
c. the estimated proceeds from the sale of the assets less the book value of the non-cash assets
d. none of the above

19. A partner's maximum loss absorbable is calculated by

a. dividing the partner's capital balance by his or her profit-and-loss sharing percentage.
b. multiplying the partner's capital balance by his or her profit-and-loss sharing percentage.
c. multiplying distributable assets by the partner's profit-sharing percentage.
d. dividing the partner's capital balance by his or her percentage interest in capital.

20. Under the doctrine of marshaling of assets, unsatisfied partnership creditors

a. must first proceed against the partner with the largest capital balance.
b. may attach to the assets of an individual partner before individual creditors have been satisfied.
c. may proceed against any personally solvent partner.
d. may proceed against any personally solvent partner but only to the extent of their capital balance in the
partnership.
PART II – PROBLEMS

21. Callie is admitted to the Adams & Beal Partnership under the bonus method. Callie contributes cash of
₱20,000 and non-cash assets with a market value of ₱30,000 and book value of ₱15,000 in exchange for a
20% ownership interest in the new partnership. Prior to the admission of Callie, the capital of the existing
partnership was ₱130,000 and an appraisal showed the partnership net assets were fairly stated.

What will be Callie’s initial capital balance?

a. ₱36,000
b. ₱50,000
c. ₱35,000
d. ₱30,000

22. Callie is admitted to the Adams & Beal Partnership under the bonus method. Callie contributes cash of
₱20,000 and non-cash assets with a market value of ₱30,000 and book value of ₱15,000 in exchange for a
20% ownership interest in the new partnership. Prior to the admission of Callie, the capital of the existing
partnership was ₱130,000 and an appraisal showed the partnership net assets were fairly stated.

What will be Callie’s initial capital balance?

a. ₱36,000
b. ₱50,000
c. ₱35,000
d. ₱30,000

23. Santiago, Aldaba and Tauzon are partners with capital balances of ₱392,000, ₱1,365,000 and ₱595,000
respectively, sharing profits and losses in the ratio of 3:2:1. Diaz is admitted as a new partner bringing with
him expertise and is to invest cash for 25% interest on the partnership which includes a credit of ₱367,500 for
bonus upon his admission. How much cash should Diaz contribute? (784,000)
a. ₱294,000
b. ₱787,500
c. ₱661,500
d. ₱1,050,000

For questions 24-25

Lima and Mitra are partners with a profit and loss ratio of 75:25 and capital balances of ₱100,000 and ₱50,000
respectively. Nova is to be admitted into the partnership by purchasing a 20% interest in the capital, profits and losses
for ₱60,000.

24. Assuming that no asset revaluation is to be made, the capital balances of Lima, and Mitra after the admission
of Nova are
a. Lima, ₱80,000 and Mitra, ₱40,000
b. Lima, ₱120,000 and Mitra, ₱60,000
c. Lima, ₱112,000 and Mitra, ₱38,000
d. Lima, ₱100,000 and Mitra, ₱50,000

25. Assuming that asset revaluation is to be made, the capital balances of Lima, Mitra and Nova are
a. ₱170,000; ₱70,000; ₱60,000
b. ₱800,000; ₱40,000; ₱30,000
c. ₱192,500; ₱77,500; ₱30,000
d. ₱100,000; ₱50,000; ₱60,000
 26. The capital accounts of the partnership of Silang, Pilar, and Agudo are presented below with their respective
profit and loss ratios:
Silang ₱278,000 (1/2)
Pilar 418,000 (1/3)
Agudo 192,000 (1/6)
Jacinto was admitted to the partnership when he purchased directly, for ₱264,000, a proportionate interest
from Silang and Pilar in the net assets and profits of the partnership. As a result, Jacinto acquired a one-fifth
interest in the net assets and profits of the firm. Assuming no asset revaluation is to be recorded, what is the
combined gain realized by Silang and Pilar upon the sale of a portion of their interests in the partnership to
Jacinto? (124,800)
a. ₱0
b. ₱86,400
c. ₱122,800
d. ₱ 164,000

27. The total of the partners’ capital accounts was ₱110,000 before the recognition of partnership asset
revaluation in preparation for the withdrawal of a partner whose profit and loss sharing ratio is 2/10. He was
paid P28,000 by the firm in final settlement for his interest. The remaining partners’ capital accounts,
excluding their share of the asset revaluation, totaled P90,000 after his withdrawal. The total asset
revaluation of the firm agreed upon was
a. ₱8,000
b. ₱20,000
c. ₱28,000
d. ₱40,000

For questions 28-30:

Julian, Kiamco, and Lapid are partners sharing profits in the ratio of 5:3:2, respectively. As of December 31, 2014, their
capital balances were P95,000 for Julian, P80,000 for Kiamco, P60,000 for Lapid. On January 1, 2016, the partners
admitted Manalo as a new partner and according to their agreement, Manalo will contribute ₱80,000 in cash to the
partnership and also pay ₱10,000 for 15% of Kiamco’s share. Manalo will be given a 20% share in profits, while the
original partners’ share will be proportionately the same as before. After the admission of Manalo, the total capital will
be P330,000 and Manalo’s capital will be ₱70,000.

28. The amount of asset revaluation is

a. ₱7,000
b. ₱15,000
c. ₱22,000
d. ₱37,000

29. The bonus in the admission of Manalo would be

a. ₱6,600
b. ₱11,000
c. ₱12,000
d. ₱22,000

30. The balance of Kiamco’s capital, after the admission of Manalo, would be
a. ₱72,600
b. ₱74,600
c. ₱79,100
d. ₱81,100
31. The partnership of Roces, Bondoc, and Mabini have capital account balances as follows: Roces, ₱35,000;
Bondoc, ₱50,000; Mabini, ₱40,000. Their profit and loss ratios are 30%, 50%, and 20%, respectively. With the
consent and knowledge of Roces and Bondoc, Mabini sold his full interest to Roxas Mabini was paid ₱46,000
in cash. The new capital balances would be: (1.) Roces, (2.) Bondoc, and (3.) Roxas
a. ₱35,000; ₱50,000; ₱46,000
b. ₱36,800; ₱53,000; ₱41,200
c. ₱35,000; ₱50,000; ₱40,000
d. ₱35,000; ₱50,000; ₱6,000

32. Dangal, Evita and Flores share partnership profits in the ratio of 2:3:5. On September 30, Flores opted to
retire from the partnership. The capital balances on this date follow:
Dangal, Capital ₱25,000
Evita, Capital ₱40,000
Flores, Capital ₱35,000
How much is to be debited from Dangal, assuming Flores is paid P39,000 in full settlement of his partnership
interest?
a. ₱1,600
b. ₱2,400
c. ₱3,000
d. ₱4,000

33. Salgado, Tiangco and Umali are partners. Umali is permitted to withdraw from the partnership on December
31. It was agreed that the settlement is to be made by payments from the personal funds of the remaining
partners to Umali. Capital balances on December 31 show
Partner Capital Balances Profit Ratio
Salgado ₱30,000 30%
Tiangco 25,000 30%
Umali 45,000 40%
If Salgado and Tiangco paid Umali ₱48,000, how much is the undervaluation of assets if the transaction will be
recorded using the revaluation of assets method?
a. ₱500
b. ₱3,000
c. ₱5,000
d. ₱7,500

34. The statement of financial position as of June 30, 2015 for the partnership of Yumul, Yason and Ylagan shows
the following information:
Total Assets P360,000

Yumul, Loan ₱ 20,000

Yumul, Capital 83,000
Yason, Capital 77,000
Ylagan, Capital 180,000
₱360,000
It was agreed among the partners that Yumul retires from the partnership and it was further agreed that the
assets be adjusted to their fair value of ₱408,000 as of June 30, 2015. The partnership would pay Yumul,
P121,000 cash for his partnership interest and includes the payment of loan to him. Yumul, Yason and Ylagan
share profits and losses, 25%, 25%, and 50%, respectively. What is Ylagan’s capital balance after the retirement
of Yumul?
a. ₱120,000
b. ₱180,000
 c. ₱200,000
d. ₱360,000
35. Partner T is personally insolvent, owing ₱400,000. Personal assets will only bring ₱150,000 when liquidated.
At the same time, T has a credit capital balance in the partnership of ₱85,000. The capital amounts of the
other partners total a (credit) balance of ₱200,000. Under the doctrine of marshaling of assets, the personal
creditors of T can collect up to __________.
a. ₱150,000
b. ₱235,000
c. ₱400,000
d. ₱435,000

36. Partners Able, Baker, and Chapman have the following personal assets, personal liabilities, and partnership
capital balances:
Able Baker Chapman
Personal assets......... ₱30,000 ₱ 80,000 ₱60,000
Personal liabilities.... 25,000 50,000 72,000
Capital balances........ 50,000 (32,000) 70,000
Assume profits and losses are allocated equally. After applying the doctrine of marshaling of assets, the capital
balances for Able, Baker, and Chapman, respectively, would be
a. ₱50,000, ₱(2,000), and ₱58,000.
b. ₱48,000, 0, and ₱58,000.
c. ₱49,000, 0, and ₱57,000.
d. ₱34,000, 0, and ₱54,000.

37. Assume that a partnership had assets with a book value of ₱240,000 and a market value of ₱195,000, outside
liabilities of ₱70,000, loans payable to partner Able of ₱20,000, and capital balances for partners Able, Baker,
and Chapman of ₱70,000, ₱30,000, and ₱50,000. How much would Able receive upon liquidation of the
partnership assuming profits and losses are allocated equally?
a. ₱70,000
b. ₱90,000
c. ₱75,000
d. ₱55,000

For questions 38-40

The partners' income and loss sharing ratio is 2:3:5, respectively.
HAKAW, BACON, AND ASADO PARTNERSHIP
Statement of Financial Position
December 31, 2017
Assets Liabilities and Partners' Equity
Cash ₱ 90,000 Liabilities ₱ 300,000
Non-cash assets 570,000 H, Capital 120,000
B, Capital 180,000
A, Capital 60,000
Total ₱660,000 Total ₱660,000

38. If the partnership is liquidated by selling the noncash assets for ₱390,000 and creditors are paid in full, which
of the following is not incorrect :note incorrect or correct? If correct letter D
a. Asado is to receive ₱30,000 cash in liquidation
b. Bacon is to receive ₱84,000 cash in liquidation
c. There is a gain of ₱180,000 in the sale of non-cash assets
d. Hakaw’s share in losses in ₱36,000
 39. If the partnership is liquidated by selling the noncash assets for ₱750,000, and creditors are paid in full, which
of the following is incorrect
a. Asado is to receive ₱150,000 cash in liquidation
b. Bacon is to receive ₱156,000 cash in liquidation
c. There is a gain of ₱180,000 in the sale of non-cash assets
d. Hakaw’s share in gain in ₱36,000

40. If the partnership is liquidated and the noncash assets are worthless, the creditors will look to whose
partner's personal assets for settlement of the creditors' claims?
a. The personal assets of Partner Asado
b. The personal assets of Partners Hakaw and Bacon.
c. The personal assets of all the partners.
d. The personal assets of the partners are not available for partnership debts.

For questions 41-42

Silverio, Domingo, Reyes, and Pasko are partners sharing earnings in the ratio of 3/21; 4/21; 6/21; and 8/21. The
balances of their capital accounts on December 31, 2011 are as follows:
Silverio ₱ 1,000
Domingo 25,000
Reyes 25,000
Pasko 9,000
₱ 60,000
The partners decide to liquidate, and they accordingly convert the non-cash assets into ₱23,200 of cash. After paying the
liabilities amounting to ₱3,000, they have ₱22,200 to divide. Assume that a debit balance of any partner’s capital is
uncollectible.
41. The book value of the non-cash assets amounted to:
a. ₱25,200
b. ₱45,400
c. ₱61,000
d. ₱63,000

42. The share of Silverio in the loss upon conversion of the non-cash assets into cash was:
a. ₱4,972
b. ₱5,257
c. ₱5,400
d. None

For questions 43-44

Fleming, Durano, and Mart are partners in a wholesale business. On January 1, 2015 the total capital was ₱60,000 and
drawings presented as follows:
Capitals Drawings
Fleming ₱12,500 ₱ 7,500
Durano 10,000 5,000
Mart 37,500 2,500
Partners agree that profit and loss ratio are shared equally. Because of the failure of some debtors to pay their
outstanding accounts, the partnership loses heavily and is compelled to liquidate. After exhausting the partnership
assets, including those arising from an operating profit of ₱9,000 in 2015, they still owe ₱10,500 to creditors on
December 31, 2015. Fleming has no personal assets but the others are well off.
43. The partnership liquidation loss:
a. None
b. ₱20,000
 c. ₱55,000
d. ₱64,500

44. The amount to be received by Mart as a result of the liquidation:

a. ₱1,637.50
b. ₱9,750
c. ₱14,250
d. ₱19,500

For questions 45-50

The balance sheet for the partnership of Joan, Charles, and Thomas, whose shares of profits and losses are 40, 50 and 10
percent, is as follows

Cash ₱50,000.00 Accounts Payable ₱150,000.00

Inventory 360,000.00 Joan, Capital 160,000.00
Charles, Capital 45,000.00
Thomas, Capital 55,000.00

TOTAL ASSETS ₱410,000.00 TOTAL LIABILITIES AND ₱410,000.00

EQUITIES

Assume Charles is insolvent

45. If the inventory is sold for ₱300,000.00, how much should Joan receive upon liquidation of the partnership?
a. ₱48,000.00
b. ₱100,000.00
c. ₱136,000.00
d. ₱160,000.00

46. If the inventory is sold for ₱180,000.00, how much should Thomas receive upon liquidation of the
partnership?
a. ₱28,000.00
b. ₱32,500.00
c. ₱37,000.00
d. ₱55,000.00

47. Using the same information as no. 46, how much would be the share of Joan to the deficiency of Charles, if
any?
a. ₱0.00
b. ₱32,500.00
c. ₱36,000.00
d. ₱45,000.00

48. Using the same information as no. 46, how much would be the share of Thomas to the deficiency of Charles,
if any?
a. ₱0.00
b. ₱5,500.00
c. ₱9,000.00
d. ₱7,500.00

49. If the inventory is sold for ₱100,000.00, how much should Joan invest after one of the partner’s deficiency
has been resolved upon?
a. ₱0.00
b. ₱56,000.00
c. ₱68,000.00
d. ₱12,000.00

50. If the inventory is sold for ₱100,000.00, how much should Thomas receive upon liquidation of the
partnership?
a. ₱0.00
b. ₱56,000.00
c. ₱68,000.00
d. ₱12,000.00

GOD BLESS TO EVERYONE

#kapitlang #CPAsinthemaking
21. A

AC CC Bonus
Old partners 80% P144,000 P130,000 P14,000
New partner 20% 36,000 50,000 (14,000)
P180,000 P180,000 ------

22. A
AC CC Bonus
Old partners 80% P144,000 P130,000 P14,000
New partner 20% 36,000 50,000 (14,000)
P180,000 P180,000 ------

23.

Total capital (P2,352,000 / 75%) P3,136,000

Interest acquired by Cuyugan x 25%
Cash to be contributed by Cuyugan P 784,000

24.A

Lima, Capital (100,000 x 20%) 20,000

Mitra, Capital (50,000 x 20%) 10,000
Nova, Capital 30,000

Lima Mitra Nova

Capital balances, beginning P100,000 P50,000
Transfer of 20% capital (20,000) ( 10,000) 30,000
Capital balances, end P 80,000 P40,000 P30,000

25. A.
Cariaso Carino Nova
Capital balances before admission Nova P100,000 P50,000
Asset Revaluation
(P60,000  20%) – P150,000 = P150,000 (150,000x75%) (150,000x25%)
Share on Asset Revaluation 112,500 37,500
Capital balances after asset revaluation P212,500 P87,500
Interest transferred 20% 20%
Capital transferred to nova (P 42,500) (P17,500) 60,000
Capital balances after the admission of Nova P 170,000 P70,000 P 60,000

26. B

Total Capital P888,000

Fraction of interest transferred x 1/5
Total interest of Jacinto P177,600
Payment of Jacinto P264,000
Total interest of Jacinto - P 177,600
Personal gained 86,400
 Silang ₱278,000 x 1/5 – 55,600 Payment of Jacinto 264,000
Pilar 418,000 x 1/5 – 83,600 Interest of Jacinto – 139,200
Total 139,200 total P124,800

27. B.

Total partners capital before asset revaluation P 110,000

Total partners capital after asset revaluation 90,000
Asset Revaluation P 20,000

28. B.

AC CC ARM
Old partners P250,000 P235,00 P15,000
New partner 80,000 80,000
P330,000 P315,000 P15,000

29, D.

Payment to Kiamco P10,000

15% transfer to Manalo P12,000
Bonus to the old partner P22,000

30. C

Julian Kiamco Lapid Manalo Total

Capital bal. bef. adm P95,000 P80,000 P60,000 P235,000
Transfer of 15% int. ( 12,000) P 12,000 ------
Contribution of Manalo 80,000 80,000
Asset Revaluation 7,500 4,500 3,000 15,000
Bonus to old partners 11,000 6,600 9,400 (22,000) ------
Capital bal. after the
admission of Cordero P113,500 P79,100 P67,400 P70,000 P330,000

31 C the P46,00 paid by Roxas to Mabini should not be reflected in the partnership book because the said amount was paid directly
to the partners. What is recorded is the same amount of the interest he paid in the partnership and the excess in the payment is a
personal gained of Mabini.

32, A

Flores, Capital 35,000

Dangal , Capital (P4,000 x2/5) 1,600
Evita Capital (P4,000 x 3/5) 2,400
Cash 39,000

33, D

Asset Revaluation method

Other Assets (P3,000  40%) 7,500
Umali, Capital 45,000
Cash 48,000
Salgado , Capital (P7,500 x 30%) 2,250
Tiangco , Capital (P7,500 x 30%) 2,250
34. C

Yumul Yason Ylagan Total

Loan and capital balances P103,000 P77,000 P180,000 P360,000

Revaluation of assets 12,000 12,000 24,000 48,000

Bonus to Dizon 6000 ( 2,000) ( 4,000)

P121,000 P82,000 P200,000 408,000

Total assets P360,000

New assets, Fair Market Value - P408,000
Asset Revaluation P 48,000

Loan and capital balances of Yumul P103,000

Asset revaluation P12,000
Total balance of Yumul - P121,000
Bonus to Dizon P6,000
35.B

Personal assets ₱150,000

credit capital balance in the partnership ₱85,000
Total P235,000

36 C
Able Baker Chapman
Personal assets......... ₱30,000 ₱ 80,000 ₱60,000
Personal liabilities.... 25,000 50,000 72,000
Total 5,000 30,000 (12,00)
Capital balances........ 50,000 (32,000) 70,000
Ending balances 50,000 ( 2,000) 58,000
Offsetting (1,000) 2,000 (1,000)
Total ending capital bal. 49,000 0 57,000
37. B

loans payable to partner Able ₱20,000

capital balances Able ₱70,000
Total 90,000

38. letter D. correction in the question. Make the incorrect to correct

Non-cash C A P I T A L
Cash Assets Liabilities Hakaw Bacon Asado
Profit and loss ratio 2/10 3/10 5/10
Balances before liquidation P 90,000 P570,000 P300,000 P120,000 P180,000 P 60,000
Sale of non-cash assets and distribution of loss 390,000 (570,000) (36,000) ( 54,000) ( 90,000)
Balances P480,000 P300,000 P84,000 P126,000 (P30,000)
Payment of liabilities (300,000) (300,000)
Balances P180,000 84,000 126,000 (30,000)
Offset (12,000) (18,000) 30,000
Balances 180,000 72,000 108,000 0
 39. B

Non-cash C A P I T A L
Cash Assets Liabilities Hakaw Bacon Asado
Profit and loss ratio 2/10 3/10 5/10
Balances before liquidation P 90,000 P570,000 P300,000 P120,000 P180,000 P 60,000
Sale of non-cash assets and distribution of loss 750,000 (570,000) 36,000 54,000 90,000
Balances P840,000 P300,000 P156,000 P234,000 P150,000
Payment of liabilities (300,000) (300,000)
Balances P540,000 P156,000 P234,000 P150,000 P23

40. C

41, C
Total assets = Total capital + Total liabilities
= P60,000 + P 3,000 P 63,000
Less Cash = P3,000 + P22,200 - P23,200 ___2,000
Book value of noncash assets P 61,000
42, B

P61,000 - P23,200 = P37,800 x 3/21 P 5,400

43. D.

Total capital (P45,000 + P9,000) P54,000

Total liabilities 10,500
Total loss on liquidation P64,500

44 B.

Fleming Durano Mart

Capital balances P 12,500 P 10,000 P 37,500
Drawing ( 7,500) ( 5,000) (2,500)
Distribution of net income 3,000 3,000 3,000
Loss on liquidation (21,500) (21,500) (21,500)
Balances (P13,500) P(13,500) P 16,500
Additional loss to Fleming 13,500 (6,750) ( 6,750)
Balances P 9,750

45.C

Non-cash C A P I T A L
Cash Assets Liabilities Joan Charles Thomas
Profit and loss ratio 40% 50% 10%
Balances before liquidation P 50,000 P360,000 P150,000 P160,000 P 45,000 P 55,000
Sale of non-cash assets and distribution of loss 300,000 (360,000) (24,000) ( 30,000) ( 6,000)
Balances P350,000 P150,000 P136,000 P15,000 P49,000
Payment of liabilities (150,000) (150,000)
Balances P200,000 136,000 15,000 49,000
 46, A

Non-cash C A P I T A L
Cash Assets Liabilities Joan Charles Thomas
Profit and loss ratio 40% 50% 10%
Balances before liquidation P 50,000 P360,000 P150,000 P160,000 P 45,000 P 55,000
Sale of non-cash assets and distribution of loss 180,000 (360,000) (72,000) ( 90,000) ( 18,000)
Balances P230,000 P150,000 P88,000 (P45,000) P37,000
Payment of liabilities (150,000) (150,000)
Balances P80,000 88,000 (45,000) 37,000
Offset (36,000) 45,000 (9,000)
Balances P80,000 52,000 28,000

47, C

48, C

49,D

Non-cash C A P I T A L
Cash Assets Liabilities Joan Charles Thomas
Profit and loss ratio 40% 50% 10%
Balances before liquidation P 50,000 P360,000 P150,000 P160,000 P 45,000 P 55,000
Sale of non-cash assets and distribution of loss 100,000 (360,000) (104,000) ( 130,000) ( 26,000)
Balances P150,000 P150,000 P56,000 (P85,000) P29,000
Payment of liabilities (150,000) (150,000)
Balances -------- 56,000 (85,000) 29,000
Offset (68,000) 85,000 (17,000)
Balances (12,000) ------------ 12,000
Additional investment P12,000 12,000
Payment to partners P 12,000 ---------- P12,000

50, D